Agenda item

Medium Term Financial Plan 2023/24 to 2026/27


Members considered a report and a presentation by the Section 151 Officer on the proposed budget for 2023/24, for the General Fund, Housing Revenue Account and Capital Programme, as part of the Council’s Medium Term Financial Plan, covering the years 2023/24 – 2026/27. 


The report included details regarding revenue and capital expenditure, the General Fund, Council Tax and the Housing Revenue Account.


A brief explanation of the budgets was provided as follows:-


·                Revenue & Capital Budgets


The revenue budget was the amount spent on the day-to-day running of the Council’s services, e.g. salaries, property and transport running costs and payments to suppliers for goods and services.  It also included the borrowing costs of money spent on capital assets.


Capital spending was mainly for buying, constructing or improving physical assets such as buildings, land vehicles, plant or equipment.


·                Housing Revenue Account


Councils with more than 50 properties were required to maintain a separate account that contained all the income and expenditure necessary to manage and maintain the housing stock.  This account was ring-fenced and must be kept separate from the General Fund.


·                General Fund


The largest sources of income were Business Rates and Council Tax.  Income was also generated from fees and charges.  The main cost to the General Fund was salaries.


A brief explanation of the proposed General Fund revenue budget was provided for each of the next four years.  It was noted that following a robust budget process, a balanced budget had been achieved for each year.


The Government had announced the one year provisional settlement on the 19th December 2022, however, no mention had been made of the Fair Funding Review or detail in relation to the New Homes Bonus or the Business Rates reset.


The budget figures for the NNDR Growth Protection Reserve had been estimated as the actual income figure was not known for the year.  Recently other Government funding had been placed in the reserve to cover any unplanned budget changes.  Based on current estimates, funding would remain in the reserve to be used in 2027/28.


The Government had limited the amount of Council Tax that could be achieved to the greater of 3% or £5.  As the limit had been increased by 1% on last year’s figure, it was thought to be more beneficial to raise the level of Council Tax by 2.99% in order to ensure that the Council would not unintentionally trigger a referendum by going over 3%.  The level of increase each year affected the base for future years and the proposed increase for 2023/24 was 2.99% which was £5.72 at Band D.


The Section 151 Officer provided a brief explanation of the Housing Revenue Account and highlighted that the main source of income was from the rent of properties.  Accounting regulations meant that a charge was made for depreciation of the Council’s housing stock each year and this was used to fund some of the capital work required to properties.


The Council had been allowed an annual rent increase of CPI plus 1%, however, due to rising inflation costs when the Autumn Statement was announced on 17th November 2022, there had been an instruction that rents for social housing would be capped at 7% for 2023/24.  It was, therefore, proposed to increase the income for dwelling rents by 5% for 2023/24.  The estimate for voids for 2023/24 – 2026/27 was 3% per year and the income budget had been reduced accordingly.  In 2023/24 the figure was £711,000, which meant that for each 1% change up or down, £237,000 could either be gained or lost.


It was noted that Fees and Charges had increased by 5% in most cases.  Heating charges had not been increased due to the changes made through the Safe and Warm Scheme.


A large proportion of the Council’s dwellings were let for social rent – 4,850 social properties and approximately 150 affordable rent.  Affordable rent was charged on new build properties and was calculated as 80% of market rent.  The average new rent for a social property would be £86.14 which was a weekly increase of £4.10.  The average new rent charge for an affordable property would be £115.46 which was a weekly increase of £5.50.


A brief explanation of the General Fund Capital Programme and Housing Revenue Account Capital Programme was provided and details were shown in Appendix 4 to the report.


Councillor Clive Moesby (Portfolio Holder for Finance) entered the meeting at 10:13 hours.


A Member requested clarification of the void properties.  The Section 151 Officer advised that it was anticipated that 3% of properties would become empty and that this had been accounted for in the Housing Revenue Account.


A Member queried whether the reduction in the valuation of properties would have an effect in terms of business rates and rents.  The Section 151 Officer stated that in terms of business rates, the value of properties were set by the Valuation Office and that rents of Council dwellings, including new houses, were valued based on 1999 levels.


Another Member referred to the proposed Council Tax increase of 2.99% and queried whether it took into account the occupation of new houses.  The Section 151 Officer advised that account had been taken of the estimated number of houses becoming occupied as at 1st April 2023.


A Member asked whether support was available to residents who were struggling to pay their rent.  The Section 151 Officer stated that for residents who claimed benefits, their benefits would be increased by the Autumn Statement.  She also mentioned that funding had been provided from Derbyshire County Council’s Housing Support Fund which could be utilised to help residents with the costs of heating.  There was also a small amount of funding available in the Discretionary Housing budget.  The Member raised concern in relation to the support available to lower paid workers who had found themselves relying on foodbanks.   He asked whether the support available was advertised.  The Section 151 Officer advised that the support was advertised and that if anyone was struggling to pay their rent/Council Tax, they should contact the Council to make appropriate payment arrangements.


The Portfolio Holder for Finance advised that a campaign had taken place last year, following advice from the Committee, to promote the Discretional Housing Benefit and extra funding had been placed in the budget to extend the scheme.  He suggested that Members should act in the role as community champions to help to get the message out to local communities.  He also reiterated that support was available to residents who were finding it difficult to pay rent/Council Tax.


A Member queried whether it would be possible to organise a poster campaign advertising the locations of foodbanks and warm places.  The Portfolio Holder for Finance suggested that this information be sent out with the Council Tax bills and he offered to discuss this further with the Communications, Marketing and Design Manager.  Another Member suggested that Facebook be used to advertise the support available to residents.


The Portfolio Holder for Finance thanked the Section 151 Officer for the presentation and offered thanks to the Finance Section for their hard work in maintaining the Council’s finances to ensure that a balanced budget had been achieved.  He stressed the importance of financial stability in order to deliver services to the residents of the District.


A Member queried the support available to businesses who were experiencing difficulties with the payment of Business Rates and rents.  The Section 151 Officer advised that the same flexible approach was given to businesses that were in arrears and that arrangements for payment could be put in place by contacting the Revenues Section.


Moved by Councillor Tom Munro and seconded by Councillor Andrew Joesbury

RESOLVED that the report be noted.


Supporting documents: